Lexology on European MMF Reforms
The website Lexology writes, "Double-up for Money Market Funds -- Council adopts Regulation," which says, "Money market funds ("MMFs") provide short-term finance to financial institutions, corporations, and governments. The (non-binding) Guidelines on a common definition of European money market funds ("Guidelines"), which were adopted by the Committee of European Securities Regulators (CESR) on 19 May 2010, were applied by 12 Member States only. In view of this, the Council of the European Union ("Council") adopted the Regulation on money market funds ("MMF Regulation" or "MMFR") on 16 May 2017, which will apply directly in all Member States." The brief asks, "What is the scope of the MMFR?" It answers, "The MMFR applies to collective investment undertakings that (a) are established, managed, or marketed in the European Union, (b) are undertakings for collective investment in transferable securities ("UCITS") under the Directive 2009/65/EC on UCITS ("UCITS Directive") or are AIFs under the Directive 2011/61/EU on alternative investment fund managers ("AIFM Directive"); and (c) invest in short-term assets (being financial assets with a residual maturity not exceeding two years); and (d) have distinct or cumulative objectives that offer returns in line with money market rates or that preserve the value of the investment." It adds, "The new rules on MMFs add a layer on top of the existing UCITS and AIFM framework (as implemented into the national legislations). In addition to these new rules, an MMF will have to continue to apply either the UCITS or AIFM framework depending on whether it is a UCITS or an AIF."
